Display Advertising - WSI Market Builders

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Display Advertising:The Billboards of the WebWSI White PaperPrepared by: Husam JandalSenior Digital Marketing Consultant,WSI

Display Advertising: The Billboards of the WebIntroductionDisplay advertising is an online form of advertising similar to billboards, television ads and print ads. Thead has a simple concept and instantly provides the viewer with upfront information about the productor service. A display ad is embedded into a web page and consists of images and text. It can includesounds, animation or video to attract more attention, or with the help of some programming, can behighly interactive. HTML code is used to instruct a webserver to load the specified website when the display adis clicked on. Revenue for display advertising is usuallyearned on a cost per click (CPC) basis.The main aim of a display advertisement is to targettraffic to the website that is publishing the ad. Like allother forms of advertising, it also aims at sales of theadvertised product or services and creating brandrecognition and awareness.HistoryDisplay advertising has only been around for the past 15 years. The first ever display ad was sold in 1993by Global Network Navigator (GNN), which now holds the title for the first commercial website inhistory. But HotWired, the world’s first commercial magazine, changed history by being the first to sell alarge amount of display ads to various corporate companies. In 1994, HotWired placed the first displayad on its website. The ad was purchased by AT&T and was 468 x 60 pixels in size. It read, “Have you everclicked your mouse right here? You will”.Since then, display advertising has come a long way. Up until 2004, display ads were measured and soldsolely on the number of impressions, but today it also relies on tracking, the amount of clicks receivedand conversions made.Why Display Advertising?The online ad market has grown from using static JPG image banners to GIF banners and now Flashbanners, which have smooth animation, exciting effects, engaging graphics and interactivity. Contentand smooth animation can be shown all together in today’s animated display ads. They take less spaceon the web page. You can put more text content and graphics and try different looks on the same webpage.Display ads also load quickly onto a web page unlike video ads. Viewers become impatient when theweb page loads slowly and usually leave the page. Display ads make a page load quickly, so users cansee the page content and ads without any hassle. Major portals like Yahoo!, MSN and AOL are usingdisplay ads for their own services and their clients, proving that display ads still have high popularity.Copyright 2011 by Research and Management. All rights reserved.Page 2 of 16

Display Advertising: The Billboards of the WebDisplay advertising accounted for around 5 billion in online advertising spend in 2009, which is a goodamount (www.emarketer.com). But search advertising on Google alone was roughly 12 billion last year.These 12 billion dollars were generated on search engine results pages that represent roughly only 5%of the Internet’s page views, which means that 5% of the Internet’s page views generates more thantwice the revenue of the rest of the Internet combined.Media ConsumptionSocial(community)12%Communication(Email and IM)27%Commerce14%Surf(content)42%Search5%By spending less than 10% of their dollars online, businesses are missing the opportunity toreach consumers where they spend over 50% of their time!So what is the differentiating factor? Basically, targeting is the key difference between display andsearch advertising. Search engine marketing is one-to-one advertising where the user’s purchase intentis the primary focus. If a viewer searches for “Rayban sunglasses”, he will see ads that match this phrase.But with display advertising, advertisers broadcast their ad on a paid ad space, which is perfect forcreating and promoting brand awareness. There is no campaign modification to suit the individualviewer.However, new technologies and advancements in the industry are set to give us improved targeting.Also, the introduction of real-time bidding will soon decrease the difference between display advertisingand search. Real-time bidding lets advertisers bid on one impression at a time, giving the ability to pickthe right impression (viewer) at the right time on the right website just like search engine marketing.The biggest advantage and most beneficial factor of display advertising is branding. Recent research bycomScore confirmed that although it might be a delayed effect, a strong branding process definitelytakes into effect when a viewer is exposed to a display ad, even when he or she doesn’t click on the ad.Copyright 2011 by Research and Management. All rights reserved.Page 3 of 16

Display Advertising: The Billboards of the WebThe research also showed that display advertisinghas an effect on user behavior even at low clickthrough rates. One hundred and thirty-ninedisplay campaigns were monitored and theresults showed that they had extensive effects ontraffic, sales and branding despite a low amountof clicks. The display campaigns gave a 46%increase in websites visits and exposed viewerswere 38% more likely to conduct an advertiserrelated branded keyword search. Twenty-sevenpercent were more likely to make a purchaseonline and 17% of viewers were more likely tomake a purchase at the advertiser’s retail store.The Effects of Display AdvertisingTypes of Display AdvertisingCategoryExample: You are advertising a new beauty cream so you would publish your ad on websites that have alargely female audience like fashion or beauty sites.Copyright 2011 by Research and Management. All rights reserved.Page 4 of 16

Display Advertising: The Billboards of the WebYou choose to advertise in this category of websites because their visitors are your target audience andyour ad is of topical interest to them. This type of advertising is best for raising brand awareness as itinvolves a long list of websites for your ad to be published on.RetargetingExample: You checked the Groupon website and later on, while you’re surfing online elsewhere, you seeGroupon display advertisements. With retargeting in display advertising, visitors who have already beento the specified website are served the ad when they continue browsing elsewhere on the Internet. Thisform of advertising is more expensive and targets a smaller audience, but promises a good end result asthe viewer has already established an interest in the product or service by visiting the publisher’swebsite before.ContextualExample: Placing display advertisements about the latest Jeep model on a car forum website.Your display ad matches the content of the web page and is of topical interest to its visitors. This type ofadvertising works best combined with category advertisement.BehavioralCopyright 2011 by Research and Management. All rights reserved.Page 5 of 16

Display Advertising: The Billboards of the WebExample: If you have been visiting a list of different real estate websites in search of a new apartment,you will be served an ad for real estate listings.Behavioral display advertising targets a specific audience based on their web history with the help ofcookies. This form of display advertising focuses on a smaller audience but provides more solid leads inthe end.A 2010 Display Advertising Study conducted by Advertiser Perceptions Inc. shows advertisers preferdemographic and behavioral targeting.Types of Display AdsTraditionalThese ads are usually rectangular in shape, contain text, and have GIF or JPEG images that link toanother page or site. They are the most common and popular ads seen online because they load quickly,are easy to design and modify and are easy to embed into a web page.Copyright 2011 by Research and Management. All rights reserved.Page 6 of 16

Display Advertising: The Billboards of the WebIn-line adsThese ads can be seen in a column on the right or left side of a web page and can be graphical with alink, or just text with hyperlinks highlighted.Pop-up adsThese ads are generated onscreen when you click a link or button on a web page. When clicked, aseparate window opens over the page you are viewing. Some viewers find these ads intrusive becausethey have to click to remove them and return to the original page.Copyright 2011 by Research and Management. All rights reserved.Page 7 of 16

Display Advertising: The Billboards of the WebAds in any of these categories might be static, animated, or "rich media". A static ad does not changewhen you look at it - it is a single image. An animated ad uses several different images to give theappearance of motion; they are usually in GIF format. A rich media ad consists of audio or video, orinvolves some programming with Java to create a very interactive ad.Standard Sizes of Display AdsPublish Your Ad OnlineBanner ad exchange program with other websitesYou can exchange display ads with another website and for every 2 of their display ads seen on yourwebsite; one of yours will be displayed on their website.The biggest advantage of joining a banner exchange program is that it allows you to post your bannerads for free on different websites. The disadvantages are that you can’t control what ads are going to beon your website and you won’t be able to decide the position of your ads on their website. It’s usuallythe exchange program that is in charge and you may not like where they put your ads or their choice ofads for your website. Some major banner exchange programs are: LinkExchangeBannerSwapCopyright 2011 by Research and Management. All rights reserved.Page 8 of 16

Display Advertising: The Billboards of the Web SmartClicksFree BannersLinkBuddiesPay publisher sites or banner ad network organizations to post your ads on a variety of websitesPut simply, banner ad networks act as brokers between advertisers and publishers. Like bannerexchange programs, they’re in charge of placing an advertiser's banner ads and tracking all activityrelated to that ad. But again, the advertiser doesn’t have much control over placement. The advantageis that the extensive services ad networks provide are available at an affordable cost.With the availability of several banner ad networks, it’s very important to do your research before youchoose one. Larger banner networks sell advertising space from high-traffic publisher sites, which isexpensive. Some banner ad networks offer affordable advertising space on smaller publisher sites, andsome networks offer discounted "remainder" advertising space, also known excess banner inventory.You can choose to pay websites or organizations by the cost per impression or pay per click method.Some major impression networks are: DoubleClickFlycastBURST! MediaContentZoneSome major click-through networks are: Banner BrokersValueClickBannerSpaceeAdsApproach websites yourselfTo place advertisements this way, you have to approach each site individually, and follow theiradvertising rules and pricing packages. This method gives you the ability to control your ads better. Youcan choose websites with relevant content and can even choose your ad’s location. This can be acheaper alternative of advertising if you target small websites that don't attract a lot of otheradvertisers. Larger sites have a set advertising package with a relatively high price tag.Most websites sell advertising space on a CPM basis, with a package of a certain amount of impressions.CPM usually depends on the popularity of the website or its type of audience. High traffic websites willcharge more, as will websites of a targeted niche or demographic.Use a digital agencyCopyright 2011 by Research and Management. All rights reserved.Page 9 of 16

Display Advertising: The Billboards of the WebThe benefits of using an agency are their expertise. They help you find the best publisher sites for yourad and make best use of your budget by negotiating the price of banner ad space. Advertising agenciesalso have a creative team to come up with campaign ideas and artwork. These agencies usually getbetter prices for advertising space because they have a lot of clients and can buy impressions in bulk.The biggest drawback of this option is that advertising agencies will only deal with a client or account ofa particular size or budget. If you have a limited advertising budget, you can opt for actual banner adplacement instead of paying for marketing strategies and high-end banner design.Use an affiliate programWith this method, you pay publishers of your display ad only when you get a specific result like aparticular amount of clicks or purchases. You can pay the publisher a percentage of your profits basedon these results. Unlike traditional banner advertising through a banner network, you don't have to paybased on click-through or impressions in bulk. You pay a small amount for each click, or you pay apercentage of your profit from a referred visitor.Measure Your CampaignThe standard method for measurement is taking the following into consideration. Clicks: The amount of clicks a display ad receivedImpressions: The number of times the display ad has been seen by visitorsCTR: A click-through rate is the ratio between clicks and impressionsCost Per Sale: This is the amount spent per sale and the figure is dependent on the cost of theproduct or service itself that is advertisedCopyright 2011 by Research and Management. All rights reserved.Page 10 of 16

Display Advertising: The Billboards of the Web Conversions: An HTML conversion tag is placed on the website (or landing page) and tracks theamount of conversions that have occurred which could be an action like a registration or apurchase.Keep in mind that these figures collectively will demonstrate your campaign’s performance. Do not relysolely on the amount of clicks. Research by comScore has shown that two-thirds of Internet users do notclick on any display ads over the course of a month and that only 16% of Internet users account for 80%of all clicks. It also showed that the viewers who click tend to be younger and less affluent than thepeople who don’t.MediaMind’s recent analysis of more than 100million conversions from thousands of campaignsworldwide found that only about 20% of conversionsare the result of a click, while the majority is theresult of viewing the banner without clicking.Hence, clicks are only a partial measure of theprogress and effectiveness of an online advertisingcampaign. About 80% of the traffic of viewers thatwere exposed to the ads is not accounted for whenmeasuring clicks only.Steps To Improve Performance of Your Display Ad CampaignPublish Your Ad on Web Pages with Specific ContentWhen a user is browsing a website with specific content, it indicates that he or she has a high level ofinterest in that particular subject. For example, if a viewer is browsing websites about hotels and hotelrates, he or she is more likely to be looking to book a hotel room. Serving a related ad to users exactlywhen he or she is showing interest in the product will result in more conversions and sales.Less Equals to More and Vice VersaLarger banners have high visibility and grab the viewer’s attention, increasing the chances for a click orconversion after they see the ad. However, your message should be simple and effective. The aim is toattract the viewer’s attention and convey your message without confusion or losing attention.Consider the FormatThe most common display ad formats are banners and ad boxes on web pages of relevant content.While these are effective, if your brand has a more complicated message like the introduction of a newproduct or service or even a change of image, consider other formats such as interstitial, gateway, andover the page ads, which allow for narratives. Interstitial ads serve between pages as a full page ad,Copyright 2011 by Research and Management. All rights reserved.Page 11 of 16

Display Advertising: The Billboards of the Webwhich times out after a specified duration before showing the website. Over-the-page ads automaticallyexpand downward pushing the site content down with it. The ad unit then auto collapses into an ad onthe page that can be expanded by viewers for additional information. The peelback ad acts as an overthe-page floater on the top right corner in a collapsed state and on interaction unfolds to reveal the fullad content. Today’s online market is filled with animated and content rich display ads because viewershave become more demanding and consumer savvy. These various ads not only grab attention becauseof the presence of motion, interactivity and narratives but enable advertisers more creative freedom.OptimizationOptimization lets advertisers know which display ad is preferred by the viewers based on their actionswith the ad. The results of each version of the ad are constantly compared and the most effective optionis served more. Effectiveness is dependent on the viewer’s response so display ads that are more likelyto be clicked on or interacted with are served frequently. This leaves no room for guesswork and notime is wasted during the campaign as even the slightest differences in two ads can generate variedlevels of activity or interest.Retarget Your ViewersAt the first and second exposure to your display ad, viewers are typically in the awareness phase so it’sonly after a few more ad views that they become favorable to your product and would have the intentto purchase or make a purchase. If your ads aren’t displayed frequently enough, your viewers will stillremain at the first stage, yet over exposure could result in an annoyed viewer.Online users have highly unpredictable browsing patterns that change constantly, so merely increasingfrequency of your ads wouldn’t solve anything. Research shows that users are more likely to click on anad that they have seen previously and that an average 61% of viewers receive only one exposure over aCopyright 2011 by Research and Management. All rights reserved.Page 12 of 16

Display Advertising: The Billboards of the Webcampaign’s lifetime, but a majority of 82% of viewers received three impressions or less (MediaMindResearch Standard Banners - Non-Standard Results).This is where retargeting comes in handy. Retargeting is a technique that serves your display ad only tothose viewers who are underexposed, ensuring that they have the chance to move forward to the nextfavorable stage and are more likely to convert or purchase.Be UsefulProvide your viewer a reason to interact with your ad.Interaction with your display ad means they are interactingwith your brand and developing a favorable attitude towards it.A recent study showed that viewers valued incentives the mostappealing factor when it comes to engaging with an online ad.Aim with Psychological MechanismsYour objective of the ad campaign can be achievable with thehelp of psychological mechanisms. For example, sales might bethe objective of the ad and the mechanism could be one of thefollowing.Reminder: This mechanism works well for a well established brand. The ad’s main function is to get theconsumer to think of and reach for the brand on their next purchase.Reinforcement: This works well when the consumer has some level of familiarity with the brand. Takethis Kaya Skin Clinic ad as an example. The goal of this ad is to strengthen the brand promise of beautyand healthy skin. The simple iconic imagery of the attractive face and brand mark are an effective way toreinforce this perception.Copyright 2011 by Research and Management. All rights reserved.Page 13 of 16

Display Advertising: The Billboards of the WebReposition: Sometimes brands change their image, logo or slogan. They can achieve this new imagesuccessfully with a display ad that is brand persistent, yet conveys the new image or slogan in a way thatconnects it to the old image.Introduce: When introducing a n

The biggest advantage of joining a banner exchange program is that it allows you to post your banner ads for free on different websites. The disadvantages are that you can’t control what ads are going to be